John Lewis Partnership chairman Jason Tarry has warned staff that worsening trading conditions are placing pressure on profits.
Tarry told the employee-owned group’s internal magazine that it was preparing for a period of “lower sales and higher costs”, with the outlook having deteriorated more sharply than expected over the past six months.
He said teams were reviewing the Partnership’s plans in response to the tougher environment, although a source close to the business said it was not preparing any major change in strategy.
The warning follows the cautious outlook issued by the Waitrose and John Lewis owner alongside its annual results in March. Retailers have since faced further inflationary pressure from elevated energy prices and weaker consumer spending.
Tarry said the Partnership was “holding its nerve” by prioritising margins and tight stock control rather than using heavy discounting to chase sales growth.
The group fell to a £21m statutory pre-tax loss in the year to 31 Jan 2026, compared with a £97m profit the previous year. The loss included £120m of exceptional charges, largely relating to non-cash write-downs of legacy IT systems.
However, profit before tax, the Partnership Bonus and exceptional items rose six per cent to £134m, while total sales increased five per cent to £13.4bn. Liquidity strengthened to £1.6bn.
Waitrose continued to outperform the department store business, with sales climbing seven per cent to £8.5bn and adjusted operating profit rising £29m to £256m. John Lewis sales increased three per cent to £4.9bn, while adjusted operating profit rose £13m to £58m.
Since taking the helm in 2024, former Tesco UK chief Tarry has refocused the Partnership on its core retail operations.
The business withdrew from its build-to-rent property venture earlier this year and has instead stepped up spending on new Waitrose shops and refurbishments across both brands.
John Lewis said shoppers were continuing to think carefully about their spending, but insisted it would maintain investment in its brands, including refurbished Waitrose stores and new beauty, sports and hospitality concepts at John Lewis.
The Partnership is scheduled to publish its half-year results on 10 September.
